U.S. Securities and Exchange Commission
Washington, DC 20549
CONFORMED COPY
FORM 1O K SB
[ X ] ANNUAL REPORT UNDER SECTION 13 or 15(d) OF THE SECURITIES
EXCHANGE
ACT OF 1934
For the fiscal year ended June 30, 1999
Commission File No. 0-22678
XAIBE INC.
NEVADA 76-0594907
(State or other jurisdiction
of incorporation (I.R.S. Employer
or organization) Identification Number)
2400 Loop 35, #1502, Alvin Texas 77512
(Address of principal executive office) (Zip code)
Issuers telephone number: (281) 331-5580
Securities registered under Section 12(b) of the Exchange Act: NONE
Securities registered under Section 12(g) of the Exchange Act:
COMMON STOCK
Check whether the issuer (1) filed all reports required to be
filed by Section 13 or 15(d) of the Exchange Act during the past 12
months (or for such shorter period that the registration was required
to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No____
Check if there is no disclosure of delinquent filers in response
to Item 405 of Regulation S-B is not contained in this form, and no
disclosure will be contained, to the best of registrant=s knowledge,
in definitive proxy or information statements incorporated by
reference in Part III of this Form 10K SB or any amendment to this
Form 10K SB. [ X ]
State issuer=s revenues for its most current fiscal year. $-0-
State the aggregate market value of the voting stock held by non-
affiliates computed by reference to the price at which the stock was
sold, or the average bid and asked prices of such stock, as of a
specific date within the past 60 days. As of December 31, 1999:
$0.00
Check whether the issuer has filed all documents and reports
required to be filed by Section 12, 13 or 15(d) of the Exchange Act
after distribution of securities under a plan confirmed by a court.
Yes______ No______ Not applicable.
The number of shares outstanding of each of the issuer=s classes
of common equity, as of the latest practicable date.
1,500,000 SHARES COMMON STOCK
This Form 10K SB consists of 7 pages.
TABLE OF CONTENTS
FORM 10K SB ANNUAL REPORT
XAIBE INC.
Facing Page
Index
Page
PART I
Item 1 Description of
Business 1
Item 2 Description of
Property 2
Item 3 Legal
Proceedings 2
Item 4 Submission of Matters to a Vote of Security
Shareholders 2
PART II
Item 5 Market for the Registrant=s Common Equity
and related Stockholder Matter 2
Item 6 Managements Discussion and Analysis of
Financial Condition and Results of
Operations 2
Item 7 Financial Statements 3
Item 8 Changes in and Disagreements on Accounting
and Financial Disclosure 3
PART III
Item 9 Directors, Executive Officers, Promoters
and Control persons, Compliance with
Section 16(a) of the Exchange Act 4
Item 10 Executive Compensation 5
Item 11 Security Ownership of Certain Beneficial Owners
and Management 5
Item 12 Certain Relationships and Related Transactions 6
Item 13 Exhibits and Reports on Form 8-K 6
Signatures 7
PART I
Item 1. Description of Business
(1) General Development of Business
XAIBE INC. (the Company or Registrant) was incorporated under the laws
of the State of Nevada on July 17, 1998, and is in the early
developmental and promotional stages. To date, the Company's only
activities have been organizational, directed at acquiring its
principal asset, raising its initial capital and developing its
business plan. The Company has not commenced commercial operations.
The Company has no full time employees and owns no real estate.
(2) Narrative Description of Business
The Registrant acquired from David R. Mortenson, an officer of the
Company, the rights to distribute and produce an oxygen enriched water
product for fish farming, aquaculture, mariculture, the husbandry of
poultry, and for remediating animal waste from dairies, feedlots of
all kinds, and for other similar uses. This agreement is for the
State of Mississippi. Mortenson acquired these rights from the
inventors of the product, N. W. Technologies, Inc. under a
distribution agreement. This technology promises to shorten time to
market for farm raised sea food and poultry and to cut costs in the
processing of animal waste, and at the same time making this waste
less harmful to the environment. While proprietary and not patented,
this process is virtually impossible to reverse engineer. The Company
will "black box" the generator of this product to maintain control.
General Business Plan
Background: This project is the result of technology developed by a
Houston Texas based Company, N. W. Technologies, for the
bioremediation of oil spills. N. W. Discerned that creating a contact
emulsifier, acting as a host for microbes, would speed up the process
of bioremediating this spilled oil. By breaking the oil into
colloidal (microscopic) particles, the microbes have increased surface
area (better access to the food source) and thus could consume spilled
oil much faster.
In spite of this better access to the food source, the microbes still
need a ready supply of oxygen. Below six to twelve inches of soil
depth, depending on soil type, the oxygen exchange is virtually non
existent, yet many oil spills reach far below that level. A process
called sparging utilizes perforated pipes placed in the affected area
that have air pumped into them that is released through the
perforations. This is an expensive process to implement and may cause
some of the volatile compounds to be released cause secondary air
pollution. To counter this problem, N. W. Technologies created a
product called Biocatalyst.
Biocatalyst is a water product with oxygen organically bonded to the
water molecule. When the microbe's extra-cellular enzymes come in
contact with the water/oxygen molecule structure, they release this
oxygen, making it available to the microbes. This process provides an
inexpensive way to provide the microbes with oxygen at any depth. N.
W. Technologies and their distributors/applicators have proven that
the use of this product substantially speeds up the remediation times
often by a factor of three to ten times. N. W. Has ceased using
ordinary water in the formulation of their products relying
exclusively on Biocatalyst, as Biocatalyst does everything that the
water does and provides the extra oxygen needed when microbes are pre-
mixed with their emulsifiers.
Since N. W. Technologies only use for this product was for
bioremediationof oil spills, Mr. Mortenson was successful in obtaining
the right for use of this product for aquaculture, fish farming,
mariculture the husbandry of poultry, and the remediation of manure
ponds, and for aquariums.
The Technology: While the technology for producing this product is
proprietary, the process is organic, and uses any water source. Once
a generator is set up and producing, production can continue
indefinitely provided that water is available (minimum of 15 gallons
per hour, maximum 30 gallons per hour), that the generator is
protected from freezing, and provided that the Companies 'biomass' is
added 5 days per week. When stored for use in beverages or other
products a dilution factor of two-to-one must be applied immediately,
to insure long-term stability. This dilution is also required when
used to water poultry. When discharged immediately into manure
remediation ponds or into ponds or tanks for raising seafood, that
dilution occurs naturally.
As part of a production package, the Company will furnish to end-users
the generator, the initial culture to create the oxygen enriched
water, and a regular supply of "biomass" to feed the generator. The
client will supply a source of usable water, electrical power and
staff to feed and operate of the generator(s). As currently
configured, each generator can produce 720 gallons of raw undiluted
product per day. Where more than this volume is needed, multiple
generators can be supplied.
The Equipment: The equipment needed to build a generator is standard
off the shelf tankage, pumps and plumbing supplies. These are
inexpensive and the generator only uses a six-foot by ten-foot print.
Total cost of an industrial grade generator is less than $5,000.00 per
unit. These units should give years of trouble free service provided
they are not abused, burned or exposed to freezing conditions.
Markets: The Company's main target markets are: Aquaculture,
Mariculture and Fish farming. Fish farming, long used in Asia is
becoming one of the key sources of protein around the world. In the
US, particularly in southern states such as Mississippi, catfish
farming, crawfish farming and the raising of rainbow trout have led
this market. Along the gulf coast, shrimp farming is also rapidly
gaining acceptance. Virtually every state game department also raises
various varieties of game fish to release into public waters. The
single largest problem encountered in fish farming is oxygen exchange.
Utilizing one or more of the Companies generators can solve this
oxygen exchange problem quickly and economically. The company will
lease the units needed on an annual basis and supply the Biomass as
required.
Husbandry of Poultry. A study done in Washington State demonstrated
that using oxygen-enriched water had significant economic benefits.
In this study, fryers came to butcher weight one day sooner (in a six
week life span) with 5% less feed, and weighed 5% more using oxygen
enriched water. This market offers a twofold opportunity for the
Company: first is the manufacture of the product for the chickens to
drink, second is the use of the product to accelerate microbial
degradation of the manure.
Aquariums. The pet market for fish is substantial. The company plans
to generate and distribute our oxygen enriched product through pet
stores and chains for use in aquariums - both small and large
facilities. The extra oxygen will enable all bacteria to remain
aerobic (oxygen users) that help produce a healthful environment for
the fish and aquatic life. Most of the product will be distributed in
gallon containers for individual use, however, the Company may lease
generators for large facilities such as Sea World.
Because the Company presently has little or no overhead or other
material financial obligations, management of the Company believes
that the Company=s short term cash requirements can be satisfied.
What little cash might be needed in the future could be supplied by
the issuance of the Company=s common stock or by loans from directors
or shareholders.
Item 2 Description of Property
An officer of the Registrant provides office facilities at 2400 Loop 35,
#1502, Alvin, TX 77511. There is no charge for the use of these
facilities. Th Company maintains no other office and owns no real
estate.
Item 3 Legal Proceedings
There are no legal proceedings in which the Company is involved.
Item 4 Submission of Matters to a Vote of Security Holders
There have been no matters submitted to a vote of the security
holders during the fourth quarter of the fiscal year ended December 31,
1999.
PART II
Item 5 Market for Common Equity and Related Stockholder Matters
There is no public trading market for the Company=s securities.
Item 6 Management Discussion and Analysis or Plan of Operation
Managements Discussion and Analysis of Financial Condition and
Results of Operations.
Liquidity and Capital Resources
The Company is a development stage company and has not had any
revenues to date. The Company had no revenues during 1999. The ability
of the Registrant to achieve its operational goals will depend upon its
ability implement its business plan. Additional capital is needed to
continue or expand its operations, but there is no assurance that such
capital in equity or debt form will be available. David R. Mortenson
has put a moratorium on the minimum purchase requirements and other
payments in an effort to assist the Company in getting into business.
Results of Operations
The Company is a development stage company which generated no
revenue during the past year. The Company accumulated a deficit of
approximately
Item 7 Financial Statements
The audited Financial Statements for the fiscal year ended June
30, 1999 are attached hereto and incorporated herein by reference.
Item 8 Changes and Disagreements with Accountants on Accounting
and Financial Disclosures
There have been no changes or disagreements with the Company=s
independent outside auditor.
(The remainder of this page was intentionally left blank)
Page 3
Part III
Item 9 Directors, Executive Officers, Promoters and Control
Persons;
Compliance with Section 16(a) of the Exchange Act
The Directors and Executive Officers of the registrant are as
follows:
Name Age Position Period of Service
John T. Bauska 47 President and Director 7/98 to present
4741 Ashley Lake Drive
Kalispell, MT 59901
Dorothy Mortenson 50 Director& Secretary 10/98 to present
2400 Loop 35, #1502
Alvin, TX 77512
The Directors of the Company hold office until the next annual
meeting of he shareholders and until their successors have been
elected and have qualified. There is no family relationship between
and executive officer and director of the Company.
Business Experience.
John T. Bauska. Mr. Bauska, who is the Company's President, has
served as an officer and director of the Company since its inception.
Mr. Bauska is currently self-employed as a business consultant,
providing consulting services relating to
mergers and acquisitions in a wide variety of fields. From 1995 to
the present Mr. Bauska has served as president of Canadex Ventures,
Inc., a Florida corporation engaged in the development of oil and
mineral resources. From 1993 to the present, he has served as a
director of Bahalil, S.A. of Paris and Damascus, Syria. Bahalil is
an international arms dealer as well as a thriving construction
concern. Since 1991, Mr. Bauska has served as president of Stratco,
Inc., Kalispell, Montana, which is involved in arms sales,
import/export of arms and accessories as well as weapons design,
manufacture and finance.
Dorothy Mortenson. Mrs. Mortenson, who is the Company's Secretary,
has served as an officer and director of the Company since its
organizational meeting on October 6, 1998.
From 1997 to the present, Mrs. Mortenson, together with her husband,
David R. Mortenson, has been engaged as a consultant, assisting small
emerging companies with marketing and sales. Also in 1997, the
Mortensons formed Safeco Products, Inc., a Texas corporation that
markets and distributes health supplements. . From 1990 to 1997 Mrs.
Mortenson assisted her husband in various enterprises in the country
of Belize.
Item 10 Executive Compensation
During the year ended December 31, 1999, the officers of the
Company received no salary or benefits. At the present time none of
the officers or directors receives any salaried compensation for their
services. The Company has no formal policy or plan regarding payment
of salaries, but should it pay them, it would be in conformance with
general business considerations as to the payment of same, such as the
desire to compensate officers and employees for time spent on behalf
of the Company.
No retirement, pension, profit sharing, stock option or insurance
programs or similar programs have been adopted by the Registrant for
the benefit of its employees.
No executive officer or director of the Company holds any option
to purchase any of the Company=s securities.
Item 11 Security Ownership of Certain Beneficial Owners and
Management
(1) Security ownership of certain beneficial owners
The following table sets forth information, as of December 31,
1998, of persons known to the Company as being the beneficial owner of
over 5% of the Company=s Common Stock.
Title Name and Address of Amount and Nature Percent
of Class Beneficial Owner Of Beneficial of
Ownership Class
Common John T.Bauska 250,000 15.63
4741 Ashley Lake Drive
Kalispell, MT 59901
Common David R.Mortenson 350,000 21.88
2400 Loop 35, #1502
Alvin, TX 77511
Common Joshua D.Smetzer 100,000 06.25
2101 Mustang Road
Suite 113
Alvin, TX 77024
Common Marie M. Charles 100,000 06.25
PO Box 4456
Pasadena, TX 77503
Common Joshua J. Mortenson 100,000 06.25
808 Cemetery Road
Alvin, TX 77511
Common Roy Donovan Hinton Jr. 100,000 06.25
9200 Alameda Genoa Road
Houston, TX 77075
(b) Security Ownership of Management as of December 31, 1995
Title Name & Address of Amount & Nature Percent
of Class Beneficial Owner Of Beneficial of
Ownership Class
Common John T. Bauska 250,000 15.63.
4714 Ashley Lake Drive
Kalispell, MT 59901
Dorothy Mortenson * -0-
2400 Loop 35, #1502
Alvin, TX 77511
* Dorothy Mortenson is the wife of David R. Mortenson who holds
350,000 shares of Common Stock.
Item 12 Certain Relationships and Related Transactions
None
Item 13 Exhibits and Reports for Form 8-K
There are no Exhibits or Reports on Form 8-K
SIGNATURES
In Accordance with Section 13 or 15(d) of the Securities Exchange
Act, the Registrant caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.
XAIBE INC.
By: /S/ John T. Bauska
Date: March 31, 2000
John T. Bauska, Director and President
By: /S/ Dorothy Mortenson
Date: March 31, 2000
Dorothy Mortenson, Director and Secretary
EXHIBIT A
REPORT
OF
INDEPENDENT AUDITOR
XAIBE, INC.
(A Development Stage Enterprise)
FINANCIAL STATEMENTS
For the Period from July 17, 1998
(Inception) through June 30, 1999
Janet Loss, C.P.A., P.C.
Certified Public Accountant
1780 South Bellaire Street
Suite 500
Denver, Colorado 80222
Janet Loss, C.P.A., P.C.
Certified Public Accountant
1780 South Bellaire Street
Suite 500
Denver, Colorado 80222
(303) 782-0878
XAIBE, INC.
(A Development Stage Enterprise)
INDEX TO FINANCIAL STATEMENTS
TABLE OF CONTENTS
ITEM PAGE
Independent Auditor=s Report 1
Balance Sheet, June 30, 1999 2
Statement of Operations, for the
Period from July 17, 1998 (Inception)
Through June 30, 1999 3
Statement of Stockholders Equity (Deficit),
For the period from July 17, 1998 (Inception)
Through June 30, 1999 4
Statement of Cash Flows, for the
Period from July 17, 1998 (Inception)
Through June 30, 1999 5
Notes to Financial Statements 6
INDEPENDENT AUDITOR=S REPORT
Board of Directors
XAIBE, Inc.
2400 Loop 35, #1502
Alvin, TX 77511
Sirs:
I have audited the accompanying Balance Sheet of Xaibe, Inc. (A Development
Stage Enterprise) as of June 30, 1999 and the Statements of Operations,
Stockholders= Equity, and Cash Flows for the period July 17, 1998
(Inception) through June 30, 1999. These financial statements are the
responsibility of the Company=s management. My responsibility is to
express an opinion on these financial statements based on my audits.
My examination was made in accordance with generally accepted auditing
standards. Those standards require that I plan and perform the audits to
obtain reasonable assurance as to whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating
the overall financial statement presentation. I believe that our audit
provides a reasonable basis for our opinion.
In my opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Xaibe, Inc.(a
development stage enterprise) as of June 30, 1999, and the results of its
operations and changes in its cash flows for the period from July 17, 1998
(Inception) through JUNE 30, 1999, in conformity with generally accepted
accounting principles.
Janet Loss, C.P.A., P.C.
June 6, 2000
Page 1
XAIBE, INC.
(A Development Stage Enterprise)
BALANCE SHEETS
JUNE 30, 1999
ASSETS
CURRENT ASSETS:
Cash in checking $ 2,437
OTHER ASSETS:
License Rights 1,000
TOTAL ASSETS $ 3,437
LIABILITIES AND STOCKHOLDERS EQUITY
CURRENT LIABILITIES:
Accounts payable $ 500
STOCKHOLDERS EQUITY:
Common stock, $0.001 Par
Value, 10,000,000 shares
Authorized, 1,600,000 shares
Issued and outstanding 1,600
Additional Paid-In capital 19,900
Retained earnings (Deficit) (18,563)
Total Stockholders= Equity 2,937
TOTAL LIABILITIES AND
STOCKHOLDERS= EQUITIES $ 3,437
The accompanying notes are an integral part of these
financial statements.
Page 2
XAIBE, INC.
(A Development Stage Enterprise)
CONDENSED STATEMENT OF OPERATIONS
For the period July 17, 1998 (Inception)
Thru June 30, 1999
REVENUES: 0
OPERATING EXPENSES:
Office expenses 558
Management fees 5,000
Legal and Accounting Fees 3,000
Consulting fees 5,000
Filing fees 5,005
Total Operating Expenses 18,563
NET (LOSS) $ 18,563
NET (LOSS) PER
SHARE OF COMMON STOCK $ (.01)
Weighted Average
Number of shares
Outstanding 1500000
The accompanying notes are an integral part of these
financial statements.
Page 3
XAIBE INC.
(A Development Stage Enterprise)
STATEMENT OF STOCKHOLDERS EQUITY
For the Period from July 17, 1998 (Inception)
Through June 30, 1999
<TABLE>
<CAPTION>
DEFICIT
ACCUMULATED
COMMON STOCK COMMON ADDITIONAL DURING THE TOTAL
NUMBER OF STOCK PAID - IN DEVELOPMENT STOCKHOLDERS
SHARES AMOUNT CAPITAL STAGE
<S> <C> <C> <C> <C> <C>
BALANCES
JULY 17, 1998 0 0 0 0 0
OCTOBER 6,
1998, SHARES
ISSUED FOR
ORGANIZATIONAL
COSTS 500,000 500 0 0 500
MAY 28
1999, SHARES
ISSUED FOR
LICENSE
AGREEMENT 1000000 1000 0 0 1,000
MAY 31, 1999
SHARES ISSUED
FOR CASH 100,000 100 19900 0 20,000
NET (LOSS) FOR
THE PERIOD
ENDED JUNE 30,
1999 0 0 0 (18563) (18563)
BALANCES
JUNE 30,
1999 1600000 1,600 19900 (18563) (2,937)
</TABLE>
The accompanying notes are an integral part of these Financial Statements
Page 4
XAIBE, INC.
(A Development Stage Enterprise)
STATEMENT OF CASH FLOWS
For the period from July 17, 1998 (Inception)
Through June 30, 1999
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net loss for the period $ (18,563)
ADJUSTMENTS TO RECONCILE
NET (LOSS) TO CASH FLOW FROM
OPERATING ACTIVITIES:
Net increase in accounts payable 500
Net cash provided (Used)
By operating activities (18,063)
CASH FLOWS FROM FINANCING
ACTIVITIES:
Issuance of
Common stock 21,500
CASH FLOWS FROM INVESTING
ACTIVITIES
Purchase of
Technology (1,000)
NET INCREASE IN CASH 2,437
CASH, BEGINNING OF PERIOD 0
CASH, END OF PERIOD $ 2,437
The accompanying notes are an integral part of these
Financial Statements.
Page 5
XAIBE INC.
(A Development Stage Enterprise)
NOTES TO FINANCIAL STATEMENTS
June 30, 1999
NOTE I SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Development Stage Activities
The Company was incorporated under the laws of the state of Nevada
in July 17, 1998, and is in the early developmental and promotional
stages. To date, the Companys only activities have been
organizational directed acquiring its principal asset, raising its
initial capital and developing its business plan. The Company has not
commenced commercial operations.
Accounting Method
The Company records income and expenses on the accrual method.
Fiscal Year-End
The Company has elected the fiscal year-end to be June 30th.
NOTE II LICENSE AGREEMENT
This agreement was made and entered into May 28, 1999 by David R
Mortenson & Associates, (Grantor) and Xaibe, Inc. (Licensee). The
Company has obtained the rights to market and manufacture the oxygen-
enriched water known as Biocatalyst now manufactured by NW
Technologies, Inc. (NW) for which the product Grantor holds the
exclusive rights as evidenced by the Distribution Agreement between NW
and Grantor dated the 26th of March, 1998.
Page 6
NOTE III PRIVATE PLACEMENT
The Company offered a private placement of 100,000 shares of the
Companys common stock by means of a private placement at $.20 per
share pursuant to Regulation D Code 504.
